Third party? Comprehensive? This guide will tell you which 1 is for you.
These days, the odds of having an accident are statistically higher than ever, especially for South African drivers. This means that car insurance isn’t just a nice to have, it’s a necessity. To be sure that you have the right kind of cover for your budget and your specific circumstances, it’s important to know what your options are.
Let’s start with what’s on offer in South Africa and what the implications are for each option. To start with, there are generally 3 types of coverage that you can choose from, including comprehensive, third party, fire and theft, and third party only car insurance. Now, let’s move onto a simple breakdown of what each product covers.
Type 1: comprehensive car insurance.
This is the most expensive option. It typically covers your car against the most risks and perils, including theft, damage from a break-in, accidental damage that you’ve caused, damage and loss due to natural disasters (like hail), and costs for a third party with whom you’ve had an accident.
This product tends to be same from most insurers in South Africa. One company that differentiates their offering significantly is King Price Insurance. The premiums for their royal comprehensive cover decrease every month along with the depreciating value of your car. Additionally, when you get this policy you can add R1 insurance to cover your bicycle, Apple watch, Nikon camera, golf clubs, and hearing aids.
Type 2: third party, fire, and theft car insurance.
This policy is relatively inexpensive and covers the theft of your car, the cost of loss or damage due to theft, hijacking or fire, and accidental damage to your car, as well as the cost of damage you cause to someone else’s car. What it generally doesn’t cover, is any damage to your car that you’ve caused or that is caused by natural disasters, like hail and floods.
This option is suitable for slightly older models that are already paid off. Some insurers, like King Price, offer third party, fire and theft insurance that allows you to get additional cover for your car’s sound equipment and other accessories.
Type 3: third party only car insurance.
Third party only is the cheapest option out of all 3, mainly because it covers the cost of damage you cause to someone else’s car and nothing else. For instance, it won’t cover theft, damage that you accidentally cause to your car, or loss or damage caused by natural disasters, like hail and floods.
Hence the name, ‘third party only’.
This policy protects you from paying gigantic costs out of your own pocket if you get into an accident with another car. If you want, you can take out additional cover for your car’s sound equipment and other accessories. You must just check if your insurer gives you this option, like King Price, who also offers car hire with their third party only car insurance.
How to make the right choice for you.
Once you’ve got all the facts you can decide what’s best for you, using these 2 questions to guide you.
- Has your car been paid off?
- Is your car of low value?
If your car has been paid off, has a relatively low value, and is a somewhat older model, it’s possible to get comprehensive car insurance. That said, it’s worth investigating either of the third party car insurance options as these are more suitable. However, if your car is financed, then the choice may not be yours and you will need to get comprehensive cover.
The full Monty doesn’t have to cost the earth. There are several insurers who pride themselves on offering quality cover for an affordable premium, like King Price who offers car insurance premiums that decrease monthly as the value of your car depreciates and has 1 of the lowest claim-overturn rates around.